DOL Rescinds Association Health Plan Rule
Published April 29, 2024
The Department of Labor (DOL) has released a final rule and rescission of 2018 rule titled, “Definition of Employer Under Section 3(5) of ERISA – Association Health Plans (AHPs),” and its alternative set of criteria from those set forth in DOL pre-rule guidance for determining when a group or association of employers is acting “indirectly in the interest of an employer” for purposes of establishing an AHP as a multiple employer group health plan. The 2018 AHP Rule was a significant departure from the Department’s longstanding pre-rule guidance on the definition of “employer” under ERISA. This departure substantially weakened the Department’s traditional criteria in a manner that would have enabled the creation of commercial AHPs functioning effectively as health insurance issuers.
"After further review of the relevant statutory language, judicial decisions, and longstanding pre-rule guidance, and further consideration of ERISA’s statutory purposes and related policy goals, as well as the public comments received on the Department’s proposed rule, [DOL] now rescinds in full the 2018 AHP Rule in order to resolve and mitigate any uncertainty regarding the status of the criteria that were set under the 2018 AHP Rule, allow for a reexamination of the criteria for a group or association of employers to be able to sponsor an AHP, and ensure that guidance being provided to the regulated community is in alignment with ERISA’s text, purposes, and policies," per the executive summary in the final rule.
The rule is effective July 1, 2024.